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CITY OF ELK RIVER
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />YEAR ENDING DECEMBER 31, 2016
<br />NOTE 7 LONG-TERM DEBT
<br />A. Components of Long -Term Debt
<br />The City had the following long-term liabilities outstanding at December 31, 2016:
<br />Description
<br />Issue Date
<br />PRIMARY GOVERNMENT
<br />02/01/23
<br />Governmental Activities:
<br />2.00-4.00%
<br />General Obligation Bonds Payable:
<br />6,975,000
<br />EDA G.O. Bonds 2007D
<br />11/08/07
<br />G.O. Capital Improvement Bonds 2010A
<br />04/21/10
<br />G.O. Capital Improvement Bonds 2012A
<br />03/15/12
<br />EDA G.O. Refunding Bonds 2013A
<br />02/12/13
<br />G.O. Improvement Refunding Bonds 2012B
<br />03/15/12
<br />Total General Obligation Bonds
<br />525,000
<br />Unamortized Bond Premiums
<br />02/01/35
<br />Compensated Absences
<br />2.00-3.00%
<br />Total Governmental Activities
<br />Business -Type Activities:
<br />General Obligation Revenue Bonds:
<br />G.O. Water Revenue Refunding Bonds 2008A 02/20/08
<br />G.O. Capital Improvement Bonds 2010A 04/21/10
<br />G.O. Sewer Revenue Bonds 2014B 08/21/14
<br />Total General Obligation Revenue Bonds
<br />Revenue Bonds
<br />Final Maturity Balance -
<br />Date Original Issue Interest Rate End of Year
<br />02/01/17
<br />10,000,000
<br />3.80%
<br />02/01/23
<br />6,105,000
<br />2.00-4.00%
<br />02/01/33
<br />6,975,000
<br />1.00-2.50%
<br />02/01/33
<br />9,685,000
<br />2.00-3.00%
<br />02/01/18
<br />1,525,000
<br />2.00%
<br />02/01/22
<br />$ 780,000
<br />0.50-2.80%
<br />08/01/23
<br />525,000
<br />3.00%
<br />02/01/35
<br />2,620,000
<br />2.00-3.00%
<br />Electric Revenue Refunding Bonds 2014A 03/13/14 08/01/18 2,030,000 2.00-4.00%
<br />Electric Revenue Bonds 2016A 07/14/16 02/01/36 9,755,000 2.00-4.00%
<br />Electric Revenue Refunding Bonds 2016B -07/14/16 02/01/22 1,370,000 2.00-4.00%
<br />Total Revenue Bonds
<br />Total Bonds
<br />Unamortized Bond Premiums
<br />Notes Payable
<br />Compensated Absences
<br />Total Business -Type Activities
<br />$ 9,620,000
<br />3,540,000
<br />6,090,000
<br />9,685,000
<br />595,000
<br />29,530,000
<br />443,384
<br />1.494.429
<br />$ 31,467,813
<br />$ 1,480,000
<br />750,000
<br />9,600,000
<br />11,830,000
<br />830,000
<br />9,755,000
<br />1,370,000
<br />11,955,000
<br />23,785,000
<br />536,331
<br />1,214,076
<br />475,132
<br />$ 26,010,539
<br />For the governmental activities, bonds payable can be summarized in the following
<br />categories:
<br />The general obligation bonds were used to construct a recreation facility, a public safety
<br />facility, a public works facility and finance a street improvement project. The recreation
<br />facility is leased to the YMCA, which has pledged to pay one-third of the bonds
<br />outstanding. The bonds are general obligations of the City and are backed by its full faith
<br />and credit.
<br />In 2013 the EDA issued $9,685,000 G.O. Refunding Bonds, Series 2013A. The bonds
<br />bear an average coupon rate of 2.2 percent and will be used to call $9,225,000 of the
<br />outstanding principal of the EDA G.O. Bonds, Series 2007D on February 1, 2017. As a
<br />result of the refunding issue, the EDA will save $1,001,112 in debt service payments and
<br />achieve an economic gain (the present value of the difference between the old and the
<br />new debt service) of $795,866.
<br />For the business -type activities, the general obligation revenue bonds were issued to
<br />finance capital improvements. The bonds are payable from future revenues pledged
<br />from the Sewer and Water funds and are backed by the full faith and credit of the City.
<br />Annual principal and interest payments on the bonds are expected to require about 21
<br />and 13 percent of revenues from the Sewer and Water funds, respectively.
<br />(55)
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